Transforming financials for a multi-location healthcare practice ready for sale

The Challenge: A Growing Practice Stuck in Financial Uncertainty

For years, a multi-location, multi-specialty healthcare practice with over a dozen doctors had focused on patient care and operational growth. Yet, when the time came to sell, they faced a hard truth: Without financial structure, they couldn’t move forward.

The company’s entire operation was run through a single bank account, not tracking profitability by doctor, location, or specialty. Lacking accounting oversight or financial leadership and relying solely on a Certified Public Accountant (CPA) for tax filings, they had no real insight into their financial health. When the company’s leadership approached an investment bank to facilitate the sale of the practice, they were met with a clear message: We can’t sell this business until the financials are in order.

The Roadblock: A Business Without a Financial Backbone

The investment bank’s concerns were justified:

• No Financial Structure: Revenues and expenses flowed through one account, with no segmentation for tracking performance.
• Lack of Profitability Insights: The owners had no clear view of which services or locations were profitable.
• Sell-Side Risks: Without clear financials, potential buyers would walk away.
• Revenue Recognition Issues: Internal reports didn’t align with tax returns, raising concerns about accuracy.

The company’s lack of financial organization was a transaction dealbreaker. Without a complete financial operations transformation, a sale couldn’t move forward, and the investment bankers wouldn’t take them to market.

The Turning Point: A Blueprint for Financial Stability

Recognizing the urgency, the investment banker referred the practice to Elliott Davis. With a proven track record of sell-side financial transformation, our team took a hands-on, cross-functional approach.

We brought together three critical teams:

• Finance Transformation Specialists to help management establish financial reporting systems.
• Accounting & Advisory Services to support month-end, quarter-end, and year-end closes, as well as accounting systems implementation.
• Transaction Advisory Team to align sell-side expectations with market realities.

Together, these teams worked under a single point of contact for a seamless transformation from a financial blank slate to a prepared, sale-ready company.

Step One: Creating a Strong Financial Operations Foundation

• Implemented and configured the practice’s accounting software, segmented by location and physician.
• Created month-end close processes for accurate, timely reporting.
• Developed a comprehensive management reporting package that included multi-year financials and key performance indicators (KPIs).

Step Two: Sell-Side Due Diligence

• Standardized revenue and cost of goods sold (COGS) calculations.
• Identified non-recurring expenses to adjust valuation accordingly.
• Conducted deep financial analysis to explore true earnings potential.

Step Three: Establishing Performance Metrics That Buyers Want

• Benchmarked profitability by doctor, location, and procedure using healthcare industry standards.
• Highlighted infusion drug revenue, a high-margin component attractive to private equity buyers.
• Integrated KPIs into financial reporting to demonstrate scalability and future growth potential.

Step Four: On-Site, White-Glove Support

• Collaborated with the practice’s management team to align financial reporting with sale objectives.
• Provided in-person support to guide leadership through the transition—a service few firms offer.

The Resolution: Better Prepared for Sale

After months of careful work, the practice was positioned for success. What was once a financial blind spot became a structured, transparent, and highly marketable business. With Elliott Davis’s integrated approach, the practice achieved:

• Financial Visibility: Owners and investment bankers now had clear insights into revenue, profitability, and performance drivers.
• Successful Market Positioning: Structured financials aligned with private equity expectations, making the practice a more attractive acquisition target.
• Lower Sell-Side Risk: Potential red flags were addressed before going to market, leading to a smoother due diligence process.
• Future Growth Confidence: With accurate financials and KPIs in place, the client could confidently expand, hire new doctors, and increase profitability.
• Sale on Track: The client was now well-positioned for a successful transaction.

Through cross-functional coordination, on-site support, and a deep understanding of private equity expectations, Elliott Davis helped a healthcare practice go from financial uncertainty to a sale-ready enterprise.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.